Blue Ocean Strategic Sequence for Oreck Direct
Oreck direct has been providing home cleaning products, such as vacuum cleaners and other household cleaning supplies since the 1970s to consumers
. They sell these products through storefronts, retailers, infomercials, and websites.
A small portion of these products is sold to commercial properties
(hotels, motels, business offices) for their cleaning needs. These commercial properties are where I believe Oreck direct would be able to expand and grow into a Blue Ocean company.
According to the Kim & Mauborgne the authors of BOS: how to create uncontested market space and make the competition irrelevant, companies such as Oreck need to consider the buyer utility, price, cost, and adoption as their sequence strategy.
- Buyer Utility and Pricing: Oreck’s current commercial vacuum cleaner is a standard Oreck XL with a more sturdy cord, heavier outer bag, and a one-year warranty. Oreck’s vacuum is a quality product, and has been rated by many companies as one of the best vacuums. One way that Oreck may be able to attract commercial businesses is to include the price of their complementary products into the price of the vacuum. This would be similar to Southwest Airlines attracting customers by not charging for luggage.
- Cost: although oreck may lose some profit per vacuum, the increase of sales may make up for those loses.
- Adoption of the strategy: I concur with kim & Mauborgne that these hurdles should be addressed first. One of the hurdles would be to convince the CEO and other partners in Oreck that the consumer is still the target audience.
Ref: Kim, W. & Mauborgne, R. 2005. Blue Ocean Strategy: How to create ncontested market space and make the competition irrelevant.